Malaysian Companies Should Develop Strategies Now To Reap The Benefits Of CPTPP, HSBC Says
KUALA LUMPUR (March 16): Malaysian companies are expected to start developing strategies to reap the benefits unlocked by the new Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), before it takes effect at the end of the year, said HSBC Malaysia.
Andrew Sill, director of commercial banking at HSBC Malaysia, said companies can look at their current business relationships to identify gaps and understand where the greatest potential lies to forge new links and tap some of the consumer markets at the fastest growing.
In a statement today, Sill said they should then look at their current supply chains, whether regional or global, and compare them to CPTPP links.
âThose who are working now to understand how the deal could impact their business model will reap the greatest benefits in the future. This is not only important for companies based in one of the member countries, but also for all companies doing business in the region, âhe added.
After that, a thorough understanding of the CPTPP and its impact on pricing for each group of goods and services would be essential for companies to re-evaluate their pricing strategies and maintain their competitive edge, Sill said.
âThe CPTPP agreement is also a remarkable piece of diplomacy. This unique pact, ushering in higher standards and economic benefits, covers emerging and advanced economies, spanning four regions.
âThis is a big step for multilateralism and international collaboration, and can serve as an example for other covenants. So while the road to ratification could still be bumpy, the signing of the CPTPP tells us that trade liberalization is alive and well, something that all of us who believe in trade as a force for good, should celebrate, âhe said. he added.
Last week, Sill said about 63% of Malaysian businesses expect a positive impact from the CPTPP, signed between 11 countries including Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.
It also has the potential to grow as Taiwan, Thailand and South Korea have expressed interest in joining, Sill said, adding that the gains could be larger.
The joining of Indonesia, South Korea, the Philippines, Taiwan and Thailand would generate $ 486 billion in total revenue gains for member economies, which is larger than what the original TPP would have brought. , including the United States.
âPerhaps the biggest benefit, the deal will eliminate most tariffs between member countries, and where tariffs are maintained, the reductions will be significant. For example, tariffs on New Zealand beef exports to Japan will drop to 9% from 38.5% today, when the deal goes into effect, âSill said citing studies.
Collectively, the improvements meant that some 500 million people in 11 countries would have access to a wider and cheaper choice of goods and services.
âCombining more than 10 trillion US dollars in economic output – around 13.5% of global GDP – these countries also offer great prospects for the business community,â he added.